Amazon FBA lets sellers store products in Amazon’s warehouses and let Amazon handle picking, packing and delivery, but this convenience comes with one of the most misunderstood VAT obligations in ecommerce. The moment your stock physically sits in a country’s warehouse, that country generally expects you to be VAT registered there, regardless of how small your sales are.
Why Amazon FBA Creates VAT Obligations
Storing inventory is the trigger, not turnover. Under UK and EU VAT rules, holding stock in a country’s Amazon fulfilment centre is treated as your business having a taxable presence there, and this obligation exists from your very first sale with no minimum threshold. This differs sharply from ordinary UK trading rules, where a UK established business only needs to register once turnover exceeds £90,000. A non established seller, whether based in the EU, the US or elsewhere, has zero threshold in the UK the instant goods are stored in a UK fulfilment centre.
The same principle applies across the EU. If you use Amazon’s Pan European FBA programme, your stock can be automatically redistributed across warehouses in the UK, Germany, France, Italy, Poland, Spain and the Czech Republic, and each of those countries can require its own local VAT registration the moment your goods land there.
UK VAT Registration Rules for FBA Sellers
For sellers based in the UK, standard registration rules apply once taxable turnover passes £90,000 in a rolling 12 month period. For any seller who is not established in the UK, including EU or international sellers, registration is mandatory from the first taxable supply where goods are already stored in the UK through FBA.
There is a further wrinkle for imported goods. Where a non UK seller ships items directly to UK customers valued at £135 or less, and the goods are located outside the UK at the point of sale, Amazon itself becomes the deemed supplier and collects and remits VAT automatically, reducing the seller’s own compliance burden for that specific scenario. This deemed supplier rule does not apply once stock is already sitting in a UK Amazon warehouse, because at that point the seller, not Amazon, is treated as making the domestic UK supply.
Once registered, sellers must file returns through Making Tax Digital compatible software, typically on a quarterly basis, and must retain the VAT registration certificate for submission to Amazon Seller Central.
EU VAT and the One Stop Shop Scheme
The EU introduced the One Stop Shop, known as OSS, in July 2021 to simplify VAT on cross border sales. A single EU wide threshold of €10,000 replaced the old country by country distance selling thresholds, and once total cross border B2C sales across all EU member states exceed that figure in a calendar year, the seller must charge VAT at the rate of the customer’s country and can report it all through one OSS return filed in their home member state.
The critical limitation sellers often miss is that OSS only covers cross border distance sales made from stock held in one EU country to a customer in another. It does not cover the following situations.
- Stock physically stored in a country through Amazon FBA or Pan European FBA
- Movements of your own inventory between Amazon warehouses in different countries
- Domestic sales made from a warehouse to a customer in that same country
- Imports of goods directly into the EU from outside
Where any of these apply, a separate local VAT registration is still required in that country, run alongside the OSS return rather than instead of it. Sellers using Pan European FBA across the EU’s five main fulfilment countries can therefore end up needing local VAT registrations in each country where stock is stored, in addition to an OSS registration for the distance sales element.
Reporting Stock Movements and Filing Multiple Returns
Sellers who trigger multiple registrations face a genuinely layered reporting obligation. Movements of stock between Amazon warehouses, for example a transfer from a German centre to a French one, must be reported as an intra Community dispatch on the German return and an intra Community arrival on the French return. On top of this, sellers typically need to file a single OSS return for all qualifying cross border distance sales, plus a regular domestic VAT return in every country where stock is stored to cover local sales and stock movements, plus a return in their home country.
| Scenario | VAT registration needed |
|---|---|
| UK established seller, no FBA storage abroad | Standard UK registration once turnover exceeds £90,000 |
| Non UK seller storing stock in a UK FBA warehouse | Mandatory UK VAT registration from first sale, zero threshold |
| EU cross border distance sales under €10,000 total | No OSS or local registration usually required |
| EU cross border distance sales over €10,000 total | OSS registration in home member state |
| Stock stored in any EU country via FBA or Pan-EU | Local VAT registration in that country regardless of OSS status |
| Non EU seller with EU import shipments over €150 | Registration may be required depending on structure |
Amazon’s VAT Calculation Service and Fee VAT
Amazon offers its own VAT Calculation Service, or VCS, to help sellers apply the correct VAT rate automatically on sales, and generates the Amazon VAT Transactions Report used to reconcile figures for each filing period. From June 2026, Amazon is moving from per unit VAT calculations to shipment level calculations to align with new European e-invoicing rules, which sellers should expect to affect how VAT appears on individual order reports.
A separate and frequently overlooked issue concerns VAT on Amazon’s own selling fees. Since August 2024, Amazon bills UK selling fees from within the UK directly, meaning UK VAT is charged on those fees rather than being handled under reverse charge, and this input VAT can be reclaimed on the seller’s own VAT return. Sellers should ensure their bookkeeping categorises these fee invoices as standard rated VAT on expenses rather than incorrectly treating them as reverse charge transactions, since misclassifying this can distort the VAT return and either overstate or understate the amount owed.
Common Compliance Mistakes
Several recurring errors show up across FBA sellers’ VAT positions.
- Assuming the UK £90,000 threshold applies to all sellers, when non UK established sellers actually have no threshold at all once stock is stored locally
- Believing OSS removes the need for any further registration, when stock stored abroad still triggers a local registration regardless of OSS enrolment
- Failing to track exactly where Amazon has physically moved stock under Pan European FBA, since sellers do not always control or immediately see these movements
- Continuing to treat Amazon UK selling fees as reverse charge after the August 2024 billing change, understating input VAT that could be reclaimed
- Not reconciling the Amazon VAT Transactions Report against actual filed returns each period, risking under or over declared VAT
How UK Ecommerce Accountants Can Help
Amazon FBA VAT compliance across the UK and EU involves overlapping thresholds, multiple registrations and reporting obligations that change as Amazon redistributes your stock. Here is how our team of accountants supports Amazon FBA sellers through this exact challenge.
- We map every country where your stock is currently stored under standard FBA or Pan European FBA, identifying exactly where VAT registration is legally required
- We handle UK VAT registration for both UK established and non UK established sellers, including cases where registration is required from the first sale with no threshold
- We advise on OSS registration and clarify precisely which of your sales qualify for OSS reporting versus which require a separate local VAT registration
- We reconcile the Amazon VAT Transactions Report against your filed returns each quarter, catching discrepancies before HMRC or an EU tax authority does
- We correctly categorise VAT on Amazon UK selling fees as standard rated input VAT following the August 2024 billing change, ensuring you reclaim everything you are entitled to
- We manage Making Tax Digital compliant quarterly filing for your UK VAT return alongside any EU obligations
- We monitor stock movement reports between Amazon warehouses so intra Community dispatches and arrivals are reported accurately in each relevant country
- We offer fixed monthly fees with a dedicated accountant experienced specifically in Amazon FBA and multi country VAT, rather than a generalist unfamiliar with marketplace rules
Frequently Asked Questions
Do I need to register for VAT the moment I start using Amazon FBA?
If your stock is stored in a country where your business is not established, yes, registration is typically required from your first sale with no minimum threshold. UK established sellers only need to register once turnover passes £90,000, unless they store stock abroad.
Does the EU One Stop Shop scheme remove the need for local VAT registrations?
No. OSS only covers cross border distance sales made from stock in one EU country to a customer in another. If you store stock in a country through FBA, you still need a local VAT registration there regardless of your OSS status.
What is the €10,000 threshold and does it apply to me?
It is the EU wide threshold for cross border B2C distance sales. Once your combined sales across all EU countries exceed this figure in a calendar year, you must charge VAT at the customer’s local rate and can report it through OSS.
Can I reclaim VAT charged on Amazon’s UK selling fees?
Yes. Since August 2024, Amazon bills UK selling fees with UK VAT applied directly, and this can be reclaimed as input VAT on your VAT return provided it is correctly categorised in your bookkeeping.
What happens if I use Amazon’s Pan European FBA programme?
Your stock may be automatically distributed across warehouses in up to five or more EU countries, and each country where stock is stored can trigger a separate local VAT registration requirement.
How often do FBA sellers need to file VAT returns?
This depends on the country. UK VAT returns are typically filed quarterly through Making Tax Digital software, while EU local returns and OSS returns often follow monthly or quarterly cycles depending on the member state.
